Justice News

New Century Coal Fraud Ends in Lengthy Prison Sentences for Ten Individuals

Scheme was based in Johnson City, Tennessee

GREENEVILLE, Tenn. – U.S. District Judge J. Ronnie Greer has sentenced 10 men to a collective total of 284 months in federal prison for their roles in the operation of a fraudulent investor scheme which defrauded 168 investors of more than $14 million dollars. The judge also ordered terms of supervised release by the U.S. Probation office, special assessments and $14,092,205 in restitution to the victims of the scheme.

Brian Rose led New Century Coal, which advertised that it developed Blue Gem coal, a special type of coal used in the manufacture of computer electronics. New Century Coal staff sold shares in nine different limited partnerships and falsely represented the existence of coal reserves, profitability, and ownership of the coal mines. No coal was ever developed and 90 percent of the investor funds was diverted to support the extravagant lifestyles of the men referenced above, including thoroughbred horses, multiple homes, ARCA Truck Racing, and extensive travel.

U.S. Attorney Nancy Stallard Harr said, “As a result of the investigation efforts and joint aggressive collection by the federal agencies involved with this case, the Department of Justice expects to be able to return some of what they lost to the victims of this fraud.” U.S. Attorney Harr added that federal agents seized homes, cars, horses, cash, and personal property which was purchased with investor funds.